In The General Theory of Employment, Interest, and Money, Keynes rejected the idea that
a. a capitalist economy always gravitates toward high levels of employment.
b. budget deficits necessarily cause recessions and inflation.
c. the ultimate breakdown of the capitalist system is inevitable.
d. international trade always helps to achieve economic stability.
a
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Keynesians view the economy as unstable as a result of the instability of aggregate demand. Which component of aggregate demand is primarily responsible?
a. Net export b. expectations c. Consumption d. Private investment e. both b and d.
If the Fed decides to use an open market operation to reduce the money supply by $1 million, and if the money multiplier is 10, then what total amount of Treasury securities must the Fed initially sell?
a. $10,000,000. b. $1,000,000. c. $100,000. d. $10,000.